An Oregon's workers' compensation official has announced he wants to research the numbers before accepting a $623,000 deal with American International Group to settle charges the company cheated on comp taxes and assessments.
“To accept the full Oregon settlement, the State of Oregon is required to sign a release. At this time, we are not prepared to do that for several reasons,” wrote John Shilts, administrator of the Oregon Workers' Compensation Division.
The restitution arrangement for Oregon, 49 other states and Washington D.C. was worked out with the New York attorney general's office and insurance department as part of a $1.6 billion agreement to settle accounting fraud charges against the company.
In addition to correcting falsified financial statements and reimbursing customers for bid rigging activity, the company agreed to repay understated workers' compensation premiums it collected in various states.
Brad Maione, a spokesman for the office of New York Attorney General Eliot Spitzer, said he could not give an immediate answer as to whether any other states were holding off signing. AIG had no comment.
Mr. Shilts, in a notice to the state's comp insurers, said “Since AIG underreported workers' compensation premiums, they have likely underpaid their portion of the Oregon Workers' Compensation Insurance Plan policy year's gain or loss while other insurer members likely overpaid over many years.”
The administrator said that currently the National Council on Compensation Insurance, the statistical rating organization, is currently attempting to get information to “determine more specifically the size of this problem.”
He said the state will wait to hear from NCCI before acting on the settlement offer.
An NCCI spokesman Greg Quinn said by e-mail that currently, “The Board of Governors of the National Workers' Compensation Reinsurance Pool, through its outside counsel, is in contact with AIG to obtain detail information with which to evaluate the settlement entered into by AIG and the New York Attorney General. The requested information has not yet been received.”
According to the settlement document, Oregon would be entitled to $361,901 for AIG's underpayment of workers' comp premium taxes and $261,851 for underpayment of residual market assessments.
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